Analyzing Trends in February’s Used-Car Retail Market

Price Changes in February

February Used-Car Price Trends. Last month saw some year-over-year declines in retail used-car prices, according to the latest CARFAX Used Car Index report, which highlighted price drops in six of the segments analyzed.

Mixed Bag of Results

Compared to January, the market showed varied results: SUV prices rose by 0.5%, while car prices dropped by 0.9%. Pickups saw a 1.1% decrease from January, marking a 5.6% drop year-over-year in February, the first time in the index’s history that they fell below $32,000.

Luxury and Specialty Vehicles

Luxury SUVs rose 0.9% in price, while luxury cars dropped 0.6%. Hybrids and EVs saw a 0.6% increase, and vans experienced a 1.5% rise month-over-month.

Factors Affecting Prices

Experts are keeping an eye on whether the price hikes in certain segments are temporary or part of a larger trend, with external factors like tax season refunds, interest rates, and potential tariffs influencing prices.

Impact of New-Car Market Dynamics

The shortage of semiconductor chips from the COVID era continues to influence the used-car market, leading to inventory shortages. As new-car availability improves, buyers are feeling the pinch in used-car stock, especially for vehicles around three years old.

New vs. Used: A Changing Market

February Used-Car Price Trends. As used-car prices remain high, some shoppers are considering new cars, especially with new vehicle incentives and discounts becoming more appealing due to changing market conditions.

J.D. Power’s Insights on the Used Car Market

J.D. Power forecasts that the average incentive spend per new vehicle will rise by 22.8% year-over-year in February, but new-car prices remain elevated. Despite strong used-car prices, trade-in equity is dropping, adding to the affordability challenges for many consumers.